BenQ to halve staff at Shanghai mobile-phone plant

BenQ Corp (明基), Taiwan's biggest cellphone maker, said it plans to cut 400 staff - or half the workforce - at its Shanghai mobile phone plant to streamline production.

The announcement came almost two months after the Taipei-based company stopped funding the unprofitable German handset business it acquired from Siemens AG. The staff reduction will start this week and will be completed by the end of next month, said Eric Yu (游克用), chief financial officer at BenQ.

The Shanghai factory is part of the assets BenQ received after it acquired Siemens' cellphone business in October last year. The German subsidiary filed for bankruptcy protection and said it may cut as many as two-thirds of its 3,050 jobs in the country after BenQ stopped funding the unit.

The Shanghai job cuts are aimed at "adjusting the company's handset manufacturing capacity" after the halt in funding for the German unit, Yu said. BenQ said on Nov. 6 its consolidated sales last month fell 44 percent from a year earlier as it stopped combining the revenue from the division in Europe.

Shares in BenQ fell 0.3 percent to close at NT$17.05 on the Taiwan Stock Exchange. The stock has slumped 46 percent this year, compared with an 11.6 percent gain in the benchmark TAIEX index.

Yu declined to give details on how much the staff cuts will cost the company or how they will affect production. Annual production capacity at BenQ's Shanghai plant will be reduced to 10 million handsets, the Taipei-based Chinese-language Economic Daily News reported yesterday, without providing comparative figures.

BenQ on Oct. 25 posted a third-quarter loss of NT$12.2 billion (US$367 million), its biggest loss in five years, because of the writedown of the German unit. The Taiwanese company said at the time that a total of 18 subsidiaries in Europe and Latin America - all related to the German unit - were reviewing their financial positions.